Direct mail generated $131.2 billion in direct-order sales to
consumers and businesses in 1995, according to the "Economic
Impact: U.S. Direct Marketing Today" report from the Direct
Marketing Association (DMA).

When you think of direct mail, you may think just of the stuff
that lands in your mailbox--each day's smorgasbord of catalogs
and offers from retailers, bankers, insurers and charities, all
wrapped, folded, stapled or stuffed into official-looking envelopes
and, sometimes, even sealed in plastic bags. According to the U.S.
Postal Service's most recent Household Diary Survey, the
average American household receives more than seven catalogs each
month. The DMA in New York City extrapolated Postal Service volume
data and determined that last year, 13.2 billion catalogs were
mailed out, including both consumer and business-to-business
mailings.

Catalogs are a big part of direct mail, surely, but there are
other opportunities for entrepreneurs who are interested in being a
part of the overall mail industry. Following is advice from four
entrepreneurs who have been on all sides of the mailing
business.

Home Office & Postal Services(HOPS)

What could be simpler than running a private mailbox service and
preparing packages for overnight delivery? Plenty, as Ken and Linda
Kunzman of Carrollton, Texas, discovered as they prepared to open
Home Office & Postal Services (HOPS) in May 1993. For one
thing, they discovered that Carrollton, a Dallas suburb of 92,000
people, had 19 other shops--mostly privately owned--doing a lot of
what they wanted to do. Undeterred, they resolved to succeed by
doing more. They've tapped into some new areas of
business, like providing computer technical support.

"It's a little family business that draws on our
strengths," says Ken, who had taken early retirement after
almost 29 years with IBM. Once their son, Nicholas, started school,
Linda wanted to get into a career that would give her the
flexibility to set her own hours. While they wanted to pattern
their business after a variety of franchise operations, the
Kunzmans felt they were too independent to operate under the strict
direction of a franchisor. Once they knew what they wanted to do,
the Kunzmans would stop by stores in other areas to talk with the
owners about their own start-ups. They found most to be open and
willing to share tips. One woman in particular, a store owner in
North Dallas, helped reaffirm their decision to go on their own
instead of with a franchise.

"She reminded us that packing boxes and putting mail into
slots is not rocket science," Ken recalls. "And she
advised us against signing an expensive, 10-year franchise
agreement with someone who would try and tell us that it
was."

It cost the Kunzmans less than $50,000 of their own savings to
start the business. It could have been less, Ken says, but they
started by buying rather than leasing their equipment--a decision
neither regrets today. When it came to naming the business, they
thought "Home Office & Postal Services" would
immediately convey what their business was all about.

To implement their decision to offer more than mail boxes and
packaging services, Linda called on her earlier work experiences to
develop a desktop publishing arm of the business, including
stationery and business-card design and resume writing, while Ken
drew on his IBM background to take on some computer-consulting
work, under the HOPS umbrella.

"We had to learn to look at our business as a convenience
store," Ken says, "and we had to form alliances with
other businesses and add services to produce the results we
wanted."

Linda adds that quality customer service brings homebased
business owners into the store. "They like the advantages of
having an address with a `suite' number," she says. The
Kunzmans also accept overnight packages for their customers, many
of whom travel and cannot always be home when the packages
arrive.

Know what you're getting into before opening a business,
they advise. The Kunzmans feel they helped themselves by joining a
professional association, Associated Mail & Parcel Centers, in
Napa, California, which provides support to its members. "You
can also visit companies like the one you want to start,"
Linda suggests. "Talk with the owners about their business
highs and lows."

"And don't expect success in six months," Ken
says. "Expect success in one or two years. It is a lot of
work, but the rewards are high."

The Gluten-Free Pantry

When she was diagnosed with celiac disease, an immunity disorder
that requires a strict gluten-free diet, Beth Hillson decided that
it wasn't going to stop her from eating the foods she loved.
Although many foods contain gluten, a protein found in such grains
as wheat, rye, oats and barley, Hillson found a way around the
problem by creating her own special baking mixes and other
gluten-free foods.

Hillson soon realized the need for a specialty-food catalog
after having a difficult time finding tasty food, besides her
personal mixes, that was wheat- and gluten-free. Fortunately, her
background in journalism and marketing, as both a food writer and
cooking teacher, provided the ideal platform for her to establish
the Gluten-Free Pantry Inc. It originated as a small project in her
basement in Glastonbury, Connecticut in 1993.

"I do all the designing of the catalog, including the
recipes, art, production, etc.," explains Hillson. "The
beauty of this business is that it balances all my skills. I think
my background, as well as my instinct for what our customers need,
is what makes this catalog successful."

For anyone interested in starting a specialty-food catalog,
there are a few things to consider, besides your background and
instincts, according to Hillson. "You are not going to be big
overnight," she says, "so start conservative and with
small investments. However, always be open to new ideas, as long as
they remain within the scope of your audience."

To find her audience, Hillson sent out samples of her mixes and
informational pamphlets to five or six support groups that
specialize in celiac disease. The members prepared the mixes at
their meetings and, pleased with the results, soon became regular
customers. Using the contacts she had made as a food writer,
Hillson garnered a large amount of publicity for Gluten-Free Pantry
Inc. from various food columnists and editors throughout the
country. Without ever purchasing a mailing list, the company grew
rapidly. Currently employing 12 workers, Gluten-Free Pantry Inc.
managed to double their revenues in the last year.

In the past three years, Gluten-Free Pantry Inc. has expanded
its catalog to include items other than baking mixes, such as
vitamins, pasta, bean soups, and ready-made cookies. They also
offer specialty items, such as heavy-duty mixers, bread slicers and
cookbooks. Even during the process of expansion, though, Hillson
concentrated on only providing products which her special audience
could not find in the general marketplace.

Hillson also stimulates sales by promoting certain recipes that
use special ingredients or require cooking utensils that are
normally difficult to find. Whenever she publishes a new recipe,
she offers the mixes and utensils to go along with it. "When
we published our English Muffin recipe in our newsletter,"
Hillson illustrates, "our mix and muffin-ring sales rose
tremendously."

During the holiday season, Gluten-Free Pantry Inc. includes an
assortment of gift items along with its regular selection of
products. "We offer gift-assortment packages and small
appliances that friends and family might want to give their
gluten-free relatives," says Hillson, "such as special
bread-makers that have proven to work well with our recipes and
mixes."

Finally, whenever customers orders products from Gluten-Free
Pantry Inc., they also receive a copy of "The Gut
Reaction," a quarterly, two-page newsletter that offers
detailed coverage on wheat- and gluten-free diets, including
recipes to make from scratch or with mixes from the catalog, as
well as updated information for the celiac population and notices
about upcoming changes within the company.

After working in the mail order market for three years, Hillson
has a few tips for maintaining a successful catalog and clientele
base. "Always remember three things: 1) Stay
focused--don't let your ideas stray from your original purpose;
2) Service and responsiveness--always provide a quick turnaround
time for your customers, and if there is a problem, call them; 3)
Quality--don't sell anything that you wouldn't buy
yourself."

Advanced Mailing Services

Jeff Burkett might not have succeeded as a mailing-list broker
had he not found a mentor to guide him through the rough spots
early on. "I would advise anyone getting into this
business--or any other business--to find a mentor in a
noncompetitive market, and put every question you can think of to
that person," Burkett says. That's just what he did before
opening Advanced Mailing Services Inc., a list brokerage, mail
processor and databank management company, seven years ago in
Greensboro, North Carolina.

Burkett's background as a CPA had included a stint as
controller at WFMY-TV, at that time owned by Harte-Hanks
Communications Inc. of San Antonio, which also owned a direct-mail
business in Greensboro. Burkett, in a mix of good and bad timing,
was recruited to switch from the TV station to that operation
shortly before the company sold the station and, unfortunately,
closed the direct-mail operation. Burkett, who had become
interested in the mailing business during his short stint there,
toyed briefly with the idea of buying the business from
Harte-Hanks, but decided instead to round up financing from local
banks and start his own business.

While his previous experience helped, Burkett says he learned
how to run his own business from the late Dewey Massey, who owned a
mailing business in Raleigh, about 70 miles east of Greensboro.
Since their companies were far enough apart geographically so as
not to be competitors, Massey agreed to help Burkett get started.
"I spent two days in his shop and learned more than I could
have in two years by myself," Burkett says. Their friendship
continued up until the time of Massey's death five years
ago.

Burkett says he didn't draw a penny from the business during
its first year. His start-up costs, including leasing 4,500 square
feet of office space and buying two large pieces of mail-processing
equipment, were less than $100,000, most of which came from a bank
loan.

While he still does large mailing jobs--such as folding,
inserting and applying labels--for clients, he is most excited
about having tapped into the list business. As a broker, Burkett
will work with a client to determine a market to target with a
mailing, and then go out and find the best list to reach that
target. On his own, Burkett has developed two lists of addresses
and telephone numbers, one of businesses and the other of
residences. This information was taken, largely, from phone
directories around the country, but the resourceful broker will
also go to whatever source necessary--mostly available from
libraries and trade associations--to meet a client's needs.

"If I've got a paint company that wants to find
homeowners whose houses might need painting," Burkett
explains, "I'll go to the courthouse and get tax listings
that show the value of a home and its age. I can break that
information out by zip code and compile a list of, say, 10-year-old
homes in a particular area that might need painting." The
price of lists varies, depending on their source, from 4 to 9 cents
per name. His mark-up is a standard 15 percent.

Besides finding a mentor, Burkett says it's critical for
anyone interested in the mail business to develop a good
relationship with the local post office. "They want you to
succeed," he says, "and they want to help you do it right
because, when you do, it helps them do a good job."

Where The Bucks Are . . .

Want to get into the direct-marketing business? Maybe you should
move to California, which led the nation last year in direct
marketing sales ($117.6 billion), according to a new survey by the
Direct Marketing Association (DMA--membership includes access to
their library & resource center, online service, publications
and seminars, and representation in the marketplace, the media, and
in government).

That figure represents the value of the jobs, sales, and
advertising expenditures generated through all types of direct
marketing. New York was in second place last year, with $77.4
billion.

In 1995, direct marketing in America generated $594.4 billion in
consumer sales and another $498.1 billion in business sales. The
study also revealed that more than 19 million jobs in 49 industry
segments are attributable to direct marketing nationwide--with
California again taking first place with more than 2.07 million
direct-marketing-related jobs.

"Direct marketing plays a unique and often hidden role in
many states' economies," says Jonah Gitlitz, DMA's
president and chief executive officer. "From retail and
business services to the pure mail order market, increasingly all
types of advertisers are relying on direct-marketing methods to
move commerce."

The top 10 states for such enterprises, ranked by total
direct-marketing sales and jobs, according to the DMA survey,
are: